Final Salary Pension Transfer Calculator
Calculate your CETV multiple, required growth rate and break-even age for a DB to SIPP transfer
Last updated: March 2026
Final Salary Pension Transfer (CETV) Calculator
Analyse whether transferring your defined benefit pension to a SIPP makes financial sense
SIPP Projection
Break-Even Analysis
Understanding Your CETV and Transfer Multiple
The transfer value multiple (sometimes called the "transfer factor") compares your CETV to your annual pension. A multiple of 25x means you are being offered £25 today for every £1 of annual DB pension. In 2026, with gilt yields around 4.5–5%, most schemes offer multiples in the 18x–26x range.
| Transfer Multiple | 2026 Assessment | Action |
|---|---|---|
| Below 15x | Very Poor | Almost never worth transferring |
| 15x – 20x | Below Average | Transfer rarely makes sense |
| 20x – 25x | Typical Range | Detailed advice needed |
| 25x – 35x | Above Average | May warrant serious consideration |
| Above 35x | Exceptional | Seek immediate advice |
What is the Critical Yield?
The critical yield is the annual net investment return your SIPP must achieve to replicate the DB pension income you would give up. The FCA requires advisers to calculate this for every transfer recommendation. As a rule of thumb:
- Critical yield below 3.5%: Transfer may be worth serious consideration
- Critical yield 3.5%–6%: Transfer borderline — depends on individual circumstances
- Critical yield above 6%: Transfer is unlikely to be in your interest in most cases
- Critical yield above 8%: Transfer almost certainly not recommended
How CETV Is Calculated by Your Pension Scheme
Defined benefit (final salary and career average) pension schemes calculate CETVs using actuarial assumptions set by the scheme actuary. The key factors are:
Gilt Yields
The primary driver of CETV levels. When gilt yields rise (as in 2022–2026), the present value of future pension payments falls, reducing CETVs dramatically. CETVs in 2026 are typically 30–50% lower than their 2020–2022 peaks.
Life Expectancy
Scheme actuaries use mortality tables (CMI projections) to estimate how long benefits will be paid. Longer projected lifespans increase CETVs. Male life expectancy at 65 is approximately 20 years; female around 22 years.
Pension Indexation
DB pensions with full RPI or CPI inflation linking are worth more than flat-rate pensions. Inflation-linked pensions generate higher CETVs because the projected payment stream is larger in nominal terms.
Spousal Benefits
Most DB schemes pay 50% of the member's pension to a surviving spouse. These dependants' pensions increase the actuarial value and thus the CETV. Transferring means you lose this automatic death benefit.
DB vs DC: The Key Differences
| Feature | Defined Benefit (DB) | Defined Contribution / SIPP |
|---|---|---|
| Income certainty | Guaranteed for life | Depends on pot size & withdrawals |
| Investment risk | Employer bears risk | Member bears all risk |
| Inflation protection | Usually CPI/RPI linked | Depends on drawdown strategy |
| Death benefits | Spouse's pension (50–67%) | Entire remaining pot to beneficiaries |
| Pension Protection Fund | Protected (90–100%) | No protection (FSCS limits apply) |
| Flexibility | Fixed income | Full drawdown flexibility |
| Lump sum | Commuted pension cash | Up to 25% tax-free cash from fund |
Abridged vs Full Advice — What You Need to Know
Since 2020, FCA-regulated pension transfer specialists can offer two levels of advice for DB transfers above £30,000:
- Abridged advice: A preliminary assessment of whether a full transfer analysis is warranted. Cost typically £500–£1,500. The adviser can conclude the transfer is clearly unsuitable (saving you money on full analysis) or that further investigation is needed.
- Full transfer advice: A comprehensive recommendation including critical yield analysis, attitude to risk, cashflow modelling and retirement income comparison. Cost typically £2,000–£5,000 or 1–3% of transfer value for large CETVs.
- Triage / guidance: Many schemes offer free triage services through MoneyHelper (formerly The Money Advice Service). This is not regulated advice but helps you understand your options before paying for advice.
When Does a DB Transfer Make Sense?
The FCA's default position is that transferring a DB pension is unlikely to be in most people's best interests. However, there are genuine circumstances where a transfer warrants serious consideration:
- Poor health / reduced life expectancy: If you are unlikely to live long enough to recover the CETV through DB income, a lump sum (especially with IHT planning) may be better.
- No financial dependants: Without a spouse or dependants needing a survivor's pension, the DB death benefit advantage is reduced.
- Very high CETV multiple (35x+): Exceptional multiples can make the arithmetic more compelling, though critical yield should still be assessed.
- Scheme sponsor financial weakness: If the employer is at real risk of insolvency and the scheme is underfunded, the PPF cap (90% at 2026 limit of approx. £44,000 p.a.) may make the full DB worth more transferred out.
- Desire for flexibility and estate planning: SIPPs do not form part of your estate for IHT until 2027 changes; after April 2027 residual SIPP funds will be subject to IHT — reducing this advantage.
Worked Example: DB Transfer Decision
Example: 55-year-old with £18,000 DB Pension and £400,000 CETV
- Annual DB pension at 65: £18,000 p.a. (CPI-linked, 50% spouse's pension)
- CETV offered: £400,000
- Transfer multiple: £400,000 ÷ £18,000 = 22.2x
- SIPP projected at 5% growth over 10 years: £400,000 × 1.05¹⁰ = £651,558
- 4% drawdown from £651,558 = £26,062 p.a.
- DB income at 65 (CPI-uplifted at 2.5% over 10 years): £18,000 × 1.025¹⁰ = £23,038 p.a.
- Critical yield needed to match DB income including inflation and spouse's pension: approximately 5.8% p.a.
- Conclusion: Transfer borderline — higher flexibility from SIPP but DB pension provides lifelong certainty. Professional advice essential.
Pension Transfer Rules and Scam Warnings
The FCA and The Pensions Regulator have identified pension transfer fraud as one of the most significant financial crime risks facing UK savers. Key protections to be aware of:
- Pension cold-calling ban: Since January 2019 it has been illegal to make unsolicited calls about pension transfers. Any cold call about your pension is a scam.
- Pension transfer warning flags: Guaranteed returns, overseas investments, time-limited offers, free pension reviews, claims to unlock your pension early (before age 55/57 from 2028).
- Pension dashboards (2026): The pensions dashboard programme is being rolled out to give individuals a single view of all their pension entitlements — helping to identify "lost" pensions before making transfer decisions.
- MPAA trigger: Flexibly accessing a SIPP (including drawdown from age 55) triggers the Money Purchase Annual Allowance (MPAA) of £10,000, permanently restricting future money purchase pension contributions. This is critical to consider if you plan to keep working after transferring.
Sources & Methodology
This calculator uses standard actuarial principles for CETV multiple calculation and compound growth projections. It does not constitute regulated financial advice.
Disclaimer: This calculator is for illustrative and educational purposes only. It does not constitute regulated financial advice. Defined benefit pension transfers are irreversible and complex decisions. Always take regulated advice from an FCA-authorised pension transfer specialist before proceeding.